Not a great start to the year for Chifley Tower’s top bankers. Street Talk understands bonus day has come and gone at UBS and there was no night on the town to show for it.
Sources said there was widespread disappointment as bankers ingested another tough year thanks to a slump in global dealmaking across equity capital markets and mergers and acquisitions. This has meant lower fees – even for the busy Australian arm of the global investment bank, which shares a worldwide bonus pool.
To make matters worse, it’s understood there are ructions in the ranks as dreaded performance reviews land on calendars. Head office is tightening the belt and talking layoffs – making for less than fun water cooler chat now that HNY is passé. Investment banking is cyclical but year-end cheques help to make good the long hours and hard work to get deals across the line.
UBS topped investment banking league tables last year, raking in approximately $166 million in fees, as reported by The Australian Financial Review. However, its fees fell 37 per cent from 2022. A UBS spokesperson declined to comment on bonuses when contacted by Street Talk.
UBS is far from alone in this respect with its US cousins Morgan Stanley, JPMorgan and Citi communicating lacklustre bonuses in January. Sources said “flat” is the new “up” for bankers as capital markets fail to spit out chunky deals. However, UBS has its own headache in the ongoing integration of rival Credit Suisse.
Last quarter, it posted its first loss since 2017 in November as the absorption of Credit Suisse dragged nonperformance. UBS swung to a $US785 million ($1.2 billion) net loss, from a $1.73 billion profit booked a year earlier, as expenses surged. The Swiss bank is set to report its fourth-quarter 2023 results this week.
Read the full story tomorrow and more on the Street Talk page.
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